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TASSCUBO BUDGET COMMITTEE Summer Meeting The Woodlands June 28, 2010

TASSCUBO BUDGET COMMITTEE Summer Meeting The Woodlands June 28, 2010. AGENDA. 1. Welcome and Introductions 2. Legislative Appropriation Request 2012-2013 3. 5% State Appropriation Reductions for 2010-2011 and 10% Plans for 2012-2013

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TASSCUBO BUDGET COMMITTEE Summer Meeting The Woodlands June 28, 2010

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  1. TASSCUBOBUDGET COMMITTEESummer MeetingThe WoodlandsJune 28, 2010

  2. AGENDA 1. Welcome and Introductions 2. Legislative Appropriation Request 2012-2013 3. 5% State Appropriation Reductions for 2010-2011 and 10% Plans for 2012-2013 4. Common Legislative Issues/Concerns for Upcoming Session 5. ARRA Reporting Update/Questions 6. Tuition and Fee Proposals for Fall 2010 and Fall 2011 7. Salary Policies for FY 2010-11 8. State Reporting Requirements 9. Open Discussion, as Time Permits

  3. Legislative Appropriation Request (LAR)- Highlights of Supplemental Instructions from UT System Budget Office

  4. LAR - Highlights of Supplemental Instructions from UT System Budget Office • 2.B. Summary of Base Request by Method of Financing (MOF) • ARRA Funding – Direct appropriations to institutions contained in Article XII, Section 25, should be grouped under Regular Appropriations using the appropriation adjustment description, Regular Appropriations – Art. XII. • Any General Revenue reductions contained in Article XII should be shown under Regular-Appropriations as adjustments to the General Revenue amounts using the relevant ABEST appropriation adjustment description, Art. XII, Sec 30, GR Reductions. • Supplemental Appropriations – Appropriations made to an institution from House Bill 4586 should be grouped under Supplemental Appropriations using the appropriations description, HB 4586, 81st Legislature, Regular Session.

  5. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Part 3.A. Strategy Requests • Part 3.B. Rider Revisions and Additions Requests • Part 3.C. Rider Appropriations and Unexpended Balances Requests • Part 4 Requests for Exceptional Items – 4.A. through 4.C. • Part 6. A. Historically Underutilized Business (HUB) Supporting Schedule • Part 6.F. Advisory Committee Supporting Schedule • Part 6.G. Homeland Security Funding Schedule • No significant changes were made to the above • Part 6. B. Current Biennium One-time Expenditure Schedule • No significant changes were made to this form. • Do not include items appropriated in Article XII, Section 25 on this form.

  6. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Part 6.H. Estimated Total of All Funds Outside the General Appropriations Act Bill Pattern Schedule • No significant changes were made to this form, however, institutions will be required to submit a different schedule than the one shown in the LAR instructions.

  7. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Part 6.I. 10 Percent Biennial Base Reduction Options Schedule • This schedule, formerly a spreadsheet submission outside of ABEST, is now an ABEST entry screen. • LBB analysts will calculate the 10% reduction, “target amount” and provide the information to each institution. The “target amount” provided by the LBB will only apply to an institution’s non-formula general revenue base. However, the Legislature is expected to apply the 10 percent reduction to the total general revenue base, including formula funding. • Institutions must submit reduction options in increments of five percent and the options must be listed in priority order.

  8. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Part 6.J. Budgetary Impacts Related to Federal Health Care Reform **NEW** • This is a new schedule requiring institutions affected by the federal legislation on health care reform identifying any costs, savings, and/or federal funds the agency has incurred or expects to incur in as a result of the federal health care reform. • It is anticipated health-related institutions will be required to provide additional information on this schedule. • It is not anticipated that general-academic institutions will be required to provide additional information for UT System, since the employee benefits and health care will be handled by the UT System.

  9. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Schedule 1A Other Educational and General Income • No significant changes were made to this form, however, institutions will now report Indirect Cost Recovery amounts as an informational item on Schedule 2. • Schedule 1B Health Related Institutions Patient Income • No significant changes were made to this form.

  10. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Schedule 2 Grand Total, Educational, General and Other Funds • Indirect Cost Recovery amounts are to be reported as Item 10. • Designated Tuition amounts are to be reported as Item 9. • For General Revenue Appropriations, institutions must report an adjustment for the portion of the formula appropriation that was swapped with ARRA funds. • For Other Appropriated Funds Income, institutions must add the portion of their formula appropriation that was swapped with ARRA Funds. • For Other Additions, institutions that received ARRA appropriations in Art. XII, Section 25 must report those funds under Other Additions.

  11. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Schedules 3A and 3B Group Insurance Data Elements • Schedule 4 Computation of OASI • Schedule5 Calculation of Retirement Proportionality and ORP Differential • Schedule 6 Capital Funding • Schedule 7 Current and Local Fund (General) Balances • No significant changes were made to the above schedules.

  12. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Schedule 8 Personnel • For Other Appropriated Funds, new categories of FTEs have been included for clarification purposes. Included in this section are FTEs paid from Art. XII, Section 25 appropriations. • Schedule 9 Expenditures Associated with E&G Space Utility Operations Fiscal Year 2010 • No significant changes were made to this form, however, institutions should include ARRA fund expenditures appropriated through the GAA. • Schedule 10A Proposed Tuition Revenue Bond Proj • Schedule 10B Tuition Revenue Bond Issuance History • No significant changes were made to these forms.

  13. LAR - Highlights of Supplemental Instructions from UT System Budget Office • Schedule 10C Revenue Capacity for Tuition Revenue Bond Projects • UT System Administration handles for UT System institutions. • Schedule 11 Special Item Information • No significant changes were made to this form. • Schedule 12A Formula Strategies by NACUBO • and Schedule 12B Object of Expense Detail for Formula Strategies and NACUBO Functions of Cost • These schedules only apply to general academic institutions. • No significant changes were made to these forms.

  14. 2010-2011 5% and 2012-2013 10% Budget Reduction Plans

  15. 5% General Revenue Reduction Plans • January 15, 2010 Letter from Governor, Lieutenant Governor, and Speaker of the House • Plans in Priority Increments totaling 5% of General Revenue: • Included Higher Education Group Insurance • Excluded Most General Revenue – Dedicated for Higher Education (Fund 704 and 770) • Excluded Tuition Revenue Bonds • Excluded Article XII ARRA appropriations • Submitted to the LBB via ABEST in February 2010

  16. 10% General Revenue Reduction Plans 2012-2013 LAR Instructions from LBB and Governor’s Office of Budget, Planning and Policy Dated May 27, 2010 As a starting point for budget deliberations, an agency’s baseline request for general revenue-related (GR and GR-Dedicated) funds may not exceed the sum of amounts expended in fiscal year 2010 and budgeted in fiscal year 2011 adjusted to reflect the full five percent reduction target identified by our offices for each agency. Agencies must also submit a supplemental schedule detailing how they would reduce the baseline request by an additional 10 percent (in five percent increments) in general revenue-related funding.

  17. 5% and 10% Reduction Plan Possibilities • Hiring Freeze – Not filling vacancies • Program Reductions resulting in layoffs • Salary Freeze • Strategic Budget Reductions by College and Vice President with goal of maintaining core missions • Across-the-Board Budget Reductions by College and Vice President • Contributions from Auxiliaries to Cover One-time Needs • Increased Revenues – Further Tuition Increases? • Move Expenditures to other Appropriate Funding Sources • Reductions in Travel Expenditures • Delaying Capital Expenditures or Projects • Commitment to Austerity Throughout Institution • Special Item Reductions • Retirement Incentives – Budget Committee Discussion

  18. Common Legislative Issues and Concerns for Upcoming Session

  19. Legislative Issues – Lab Fees Recommendation from Budget Committee (see attached): Modify Section 54.501 of the Texas Education Code, Laboratory Fees, to allow lab fees to be collected as designated funds and allow expenditures on repairs and maintenance on lab equipment as well as other ancillary costs tied specifically to lab courses.

  20. Legislative Issues – Lab Fees • The existing statute states that laboratory fees “shall be accounted for as educational and general funds.” • It also states this fee may be collected “in an amount sufficient to cover the general cost of laboratory materials and supplies used by a student.” • Does not allow for lab fee revenue to be expended on repairs or maintenance of laboratory equipment that exists solely for the incremental use by students or other non-consumable ancillary costs such as software or anatomical models. • This represents an insignificant amount of revenue for each institution and if accounted for as designated funds, the manual effort would be considerably less.

  21. Legislative Issues – Lab Fees Wording Changes: • Sec. 54.501.  LABORATORY FEES.  (a)  An institution of higher education shall set and collect a laboratory fee in an amount sufficient to cover the general cost of laboratory materials and supplies used by a student including an amount to cover maintenance on laboratory equipment and other ancillary costs in support of the laboratory curriculum. …. • (b)  Laboratory fees collected by an institution under this section shall be accounted for as [educational and general funds]designated funds.

  22. Legislative Issues – Lab Fees Impact of Change: • Promotes fiscal efficiencies in university business processes. • Allows greater laboratory fee expenditure flexibility. Laboratory fees will fund the curriculum beyond materials and supplies and free up funds that are currently being used to fund those ancillary costs.

  23. Legislative Issues • “Employee Only” Health Insurance – Should employees contribute a nominal amount to health insurance premiums? • Others?

  24. ARRA Fund Reporting

  25. ARRA Reporting Review • State Comptroller – Weekly Reports • THECB Reports – Monthly on 5th once Notice of Grant Award is received/executed • Federal 1512 Reports - Quarterly on the 10th (January, April, July, October) • LBB/Article XII Section 5 Reports – Quarterly (4/12, 7/12, 10/11, Jan 2011, Apr 2011, Jul 2011, Oct 2011)

  26. Construction Funded with American Recovery and Reinvestment Act of 2009 (ARRA)General Provisions (Title XVI) • Buy American (Section 1605) • “…all of the iron, steel, and manufactured goods used in the project are produced in the United States.” • Wage Requirements (Section 1606) • “…all laborers and mechanics employed by contractors and subcontractors…shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality” • Davis Bacon Act (40 U.S.C. § 3142) requires certified payrolls (Security Hint: contractor remove Social Security Numbers and use an alternate identifier)

  27. Reporting for ARRA Construction Projects • Individual (not cumulative) payments to vendors over $25k require additional information • Vendor Name, Payment Amount, Vendor DUNS Number, Vendor Headquarters Zip Code + 4, 250 character description of the Product or Service, Number of jobs created/retained by the payment, Description of the Job Titles created/retained • Internal Service Center charges may cause issues with job reporting

  28. Reporting for ARRA Construction Projects • Possible limitation on pre-award reimbursements • Can be problematic for proposals that require design work to be completed in advance

  29. ARRA Construction Projects – Buy American Provision (Section 1605) • SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS. • (a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. • (b) Subsection (a) shall not apply in any case or category of cases in which the head of the Federal department or agency involved finds that— • (1) applying subsection (a) would be inconsistent with the public interest; • (2) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or • (3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent. (c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived. (d) This section shall be applied in a manner consistent with United States obligations under international agreements.

  30. ARRA Websites • THECB ARRA site http://www.thecb.state.tx.us/arra • State Comptroller ARRA Sites • FMX Site https://fmx.cpa.state.tx.us/fmx/recovery/index.php • Public Site http://www.window.state.tx.us/recovery/ • US Dept. of Education SFSF site http://www2.ed.gov/programs/statestabilization/index.html • US Dept. of Education Applicant Information Page http://www2.ed.gov/programs/statestabilization/applicant.html • OMB 12/18/09 Guidance on ARRA Data Quality, Non-Reporting Recipients and Reporting of Job Estimates http://www.whitehouse.gov/omb/assets/memoranda_2010/m10-08.pdf

  31. Contact Informationfor ARRA presenters at February TASSCUBO meeting. Anthony Turrietta UT-El Paso 915-747-7808 aturrietta@utep.edu Alan Werchan UT System Administration 512-499-4275 awerchan@utsystem.edu

  32. Tuition and Fee Increases for Fall 2010 and Fall 2011

  33. House Concurrent Resolution – H.C.R. No. 288 – Representative Branch Make every effort to ensure that the total academic costs, including tuition, mandatory academic fees, and any other academic-related general fees and college course fees, charged to a resident undergraduate student for the 2010-2011, 2011-2012, or 2012-2013 academic year Do not exceed the greater of 3.95 % or $280

  34. Regents’ Approved Tuition and Fees UT Austin – Total Academic Cost**Includes $65 Student Activity Center tuition increase approved via student referendum.Plans at other Institutions?

  35. Student Referendums – Impact on Tuition/Fees Environmental Service Fee, Section 54.5041 (HB 3353, Naishtat) – “Green Fee” (a)  …may charge each student enrolled at the institution an environmental service fee, if the fee has been approved by a majority vote of the students enrolled… (b)  …the amount of the fee may not exceed: (1)  $5 for each regular semester or summer term of more than six weeks; or (2)  $2.50 for each summer session of six weeks or less. (c)  The fee may be used only to: (1)  provide environmental improvements …related to recycling, energy efficiency and renewable energy, transportation, employment, product purchasing, planning and maintenance, or irrigation; or (2)  provide matching funds for grants to obtain environmental improvements …

  36. Merit Plans for FY 2010-11 UT AustinFY 09-10 – No staff Merit Increases, some targeted Faculty salary increasesFY 10-11 – One-time 2% merit policy funded by units, no central funding provided. Will be paid in a lump-sum in early December.Plans at other Institutions?

  37. State Reporting Requirements

  38. Status of Report Reduction Effort Meeting held in May, Attendees: Rissa Potter, CPUPC, THECB Planning and Accountability Staff UT Austin Budget and Information Management and Analysis representatives, Mike McKinney, Chancellor, TAMU System ACTION ITEMS: THECB will prepare a list of CB reports with a notation of how they are used University representatives will list state (non-CB) and federal reports, providing a notation if there is duplication with an existing CB report and/or indicate if the CB can submit the data instead of each Higher Ed Institution Universities will prepare a list of data elements Universities will provide examples of CB reports/data that are used and note if/where definitions need to be updated

  39. Status of Report Reduction Effort Suggestions for Legislation: THECB shall be the initial source of public Higher Education data THECB’s Data Request Committee process for reviewing data requests will be applied, with the committee to include institutional representatives If data is already collected, THECB will provide response A sunset process will be suggested regarding existing report requirements Encourage alignment of THECB, LBB and Comptroller performance measures, preferably with the THECB providing data/reporting Review NSF, IPEDS, etc. to seek opportunities for a crosswalk (data definitions at the federal and state level)

  40. Status of Report Reduction Effort Additional Action: THECB interim testimony on reporting is scheduled for August 19 Senate Higher Education ; Charge 6— Review the structure and operation of the Texas Higher Education Coordinating Board. Evaluate the board’s data collection systems, including costs to higher education institutions, and make recommendations for improvements. Include an assessment of higher education reporting requirements and make recommendations to eliminate duplicate requirements and streamline reporting. Texas Association of Institutional Research (TAIR) is also working on this with a new Data Committee that is being formed this summer.

  41. TASSCUBO Budget Committee Submission to Cost Efficiency Committee In Response to Governor’s Executive Order on Comprehensive Review of Higher Education Costs (2)  Streamline the Legislative Appropriation (LAR) Process – The TASSCUBO-Budget committee has discussed recommendations to streamline the LAR process and printed document requirements.  The TASSCUBO-Budget committee would like to coordinate closely with the Legislative Budget Board and the Governor’s Office on these possible efficiencies.

  42. LAR Process Improvements Gordon Thyberg, Director of Budgeting at Texas State University has volunteered to chair a subcommittee to refine the LAR Process Improvement Suggestions developed by the Budget Committee. Group will Prioritize, Group, and Justify the Top Recommendations. Additional Volunteers?

  43. Open Discussion

  44. TASSCUBO Budget CommitteeContact Information Mary Knight, Chair UT-Austin Budget Office 512-471-3727 bd.knightme@austin.utexas.edu

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